Markets

Daily Market Wire 2 November 2018

Guest Author, November 2, 2018

Firmer across the board, particularly in oilseeds on the back of renewed hope of some middle ground in the US-China trade dispute.

  • CBOT Wheat was up 7.5c to 508c
  • Kansas wheat up 8c to 501.25c
  • corn up 3.5c to 366.75c
  • soybeans up 30c to 869c
  • Winnipeg canola up 7.5$C to 482.5$C
  • Matif canola up 1.75€ to 377.5€
  • Dow Jones up 264.980000000003  to 25380.74
  • Crude Oil down -1.77c to 63.54c
  • AUD up to 0.7206c
  • CAD down to 1.30832c (AUDCAD 0.94252)
  • EUR up to 1.1405c (AUDEUR 0.6316).

Soybeans

Beans was the leader today, with the most at stake in the China-US trade impasse and having been beaten up the most in the last 6 months as a result, the market responded strongly to even a hint of a possible meeting of minds between the two trade ministries.  Whilst there is nothing official, a tweet from President Trump stating “we had a long and very good conversation” was all the market needed to jump off the deck.  There is always politics in play and with mid-term elections next week, it might be a case of buy the rumour and sell the fact, time will tell….   Soybean meal was $7 firmer and oil up 30c.  Canola was softer earlier on the firmer CAD, however rebounded strongly on the activity in the bean pit.

Corn

Corn found support from the bean market in an otherwise dull day in corn trading.  All eyes now move forward to the WASDE report scheduled for Nov. 8.  Expectations are that the trend of lower yields from September to October should see a reduction in yield to below 180bu/acre.

Wheat

Wheat continues to focus on demand in the aftermath of the Egyptian tender.  Export data with 582kmt reported, which was above expectations that sat 200-500kmt.  Bangladesh popped up with some confirmed HRS demand and looks like more to come, further highlighting that inch by inch the US wheat market is starting to claw back some much needed demand.  The weaker USD index overnight will help US competitiveness the these two factors along with outside support from Beans allowed the market to push higher.  Matif wheat rallied 2 Euro, with more general risk on behaviour seeping into the Eurozone markets as UK-EU financial market discussions progress well.

Barley

SAGO (Saudi) announced a tender for barley which is to be held later today for 1mmt, all eyes in the barley market will be on this and wheat traders will also anticipate a follow up tender for Saudi wheat shortly too.

Australia

Aussie markets were nominally stronger yesterday, however liquidity has certainly dried up and we saw zero trade for day on the ASX.  With only 78 contracts trading on the Jan’19 contract in the exchange this week, that is the lowest weekly trade since the last week in March this year and well below the recent weekly activity of 500-1500 contracts that we have had in the last few months.  Maybe Friday brings with it a rush of energy!  It certainly seems that within the middle of the range where the east coast is just below import parity from WA and above flat price levels where consumers seem willing to engage the market is struggling to find some life.  We would expect this to continue until harvest gets underway and the farmers and consumers re-engage.  For now there is not a lot of new news out there….  Forecast looks okay for the eastern states, albeit to late, but will provide some relief to drought stricken areas nonetheless.

Source: Lachstock Consulting

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